Wednesday, December 20, 2006

Peak Oil - Oil Depletion

Peak Oil is often assumed to mean the end of oil. It doesn't. It means we have used up 50% or better of available, easy to reach, inexpensive oil. Anything else we obtain will be more difficult, and thus more costly. If we wish to avoid fuel shortages, both in transportation and industry, we need to start now and put policies and actions in place to mitigate the impact. To the extent that local communities are aware of the issue, and addressing it, they are. Here is a primer on oil depletion including a cornucopian outcome alongside one that is not nearly so rosy, althought it does not predict the end of the world as we know it.

As a side note; some readers may recall the September news about the Gulf of Mexico (GOM) well known as Jack. If you thought Jack was going to be online soon, think again. Bloomberg News is reporting that the drilling rig has moved on to new assignments. If you read the article, it points out the economic realities of oil drilling, especially in deep water. This is one example of oil that will become more expensive as time goes by. Imagine doing this on the Continental shelf or the polar regions.

And still I read about the expectations that new businesses will automatically include sufficient parking for prospective customers. Auto congestion does nothing for the quality of life. If that's what I wanted I'd have found a way to buy a condo in the Gold Coast. Given what may be facing us in 20 years, I suspect any new parking garages will be barely paid for in that time, and will also be pretty worthless as garages.

As we work the issues of development in Rogers Park we need to take a much longer view and employ a longer timeline. I'd suggest we adopt the patience and determination of the mainland Chinese. The DOD has reported in Government Computer News that the People's Liberation Army (PLA) has a 50 year window for achieving their goals. They are busily trying to hack sensitive military networks, and are in no particular rush to the finish line. They simply want to get to it, and will do whatever it takes to get there and take as long as needed.

I think we need to be as patient in bringing sustainable development to Rogers Park that recognizes the need for improved public transportation, walkable neighborhoods, and an ongoing de-emphasis on accommodating automobiles. It will take a long time to get us there, but get there we must. Hopefully before fuel shortages kick in. We can be visionaries, or simply travel the same path as everyone else, and face the music later.

1 comment:

Paradise said...

PO doesn't mean the end of oil, but it means a pretty straight path down the depletion slope. Consider that the United States was the world's largest oil producer until 1970, when our fields in Texas and Oklahoma peaked.

We felt that event with a vengeance three years later, in 1973, and I will never forget the lines for gasoline and the rapid deterioration, from that point forward, of our economy and the manufacturing that supported it.

Only the discovery of the North Fields, controlled by BP, saved us and gave us 20 years of cheap oil. Those fields are now depleting even more rapidly than our elephant fields in the states did, because of more efficient drilling methods.

The idea is to make our depleting oil supply last as long as possible while it is depleting at the rate of 3% or more, which is pretty horrifying when you accrete that rate of depletion out over ten years, and then offset it against dramatically increasing demand in places like China and India. You could really feel chilled when you consider how many more cars China could put on the road in the next 10 years, considering that only 10%, or less of their population of 1.3 B owns cars at present. If just 5% more of their people acquire cars ,that means another 70 MM cars on the road. The picture is similar in India, and at the same time, our own demand here in the states, fueled by 5% a year growth in the population and continued emphasis on sprawl development in the distant hinterlands, is not abating.

To me, it means like a slow, or not so slow, grinding down of the whole population into poverty, or one notch above, with a corresponding decrease in comfort and amenity. It means middle income people who have plenty of disposable income now will be paying most of their money for housing and utilities, and will be getting way less housing and warmth and convenience for thier money.

Given the rate of depletion as we pass peak, 10 years could make a massive difference in the terms of our lives, and it behooves us to meet with the situation NOW, because if we wait until we are visibly and deeply into depletion, we will not have the resources to put the things into place that we will need to live comfortable lives with the technological amenities we will need to live with the same level of comfort we have now, or anything approaching it.

Remember, if we have to get buy on just 10% less oil than we currently use, that would mean making major changes in the way we do things. It will surely mean much higher fuel costs, which means that everything, absolutely everything we eat or wear or live in or use in any way, will become much more expensive. Inflation will be rampant while are financial markets go into freefall. Recessaflation, they called it in the 70s, which really means the general impoverishment of the country.

And how will we put these things in place if no one sees the problem to begin with?
The worst part is what will happen to the poor, and how many more of us will become extremely poor, as our economy deteriorates and basic services and goods become scarce and expensive?